Lending Club Portfolio Reorganization
Hello frugal people!!!!
I have written about Lending Club in the past and how much I love the service. I got a loan with LendingClub to help take care of some credit card debt and it was truly one of the best financial moves I have made in the past.
Using Lending Club helped me to pay a lower rate on my debt because I was able to consolidate my higher credit card debt into one lower interest loan. I was able to save money on the repayments because I had a lower rate of interest after the consolidation.
Because I was so happy with the rate and customer service that I got with LendingClub I decided to become a lender myself. I had a few loans (at $25 each) set up in four different portfolios. Now the common wisdom of investing says that you should only invest what you can afford to lose.
I was not planning on losing any money…but I decided not to count on the repayments because I would be disappointed if the loans were not repaid. To this date I only have one late loan out of the 11 that I funded over my time with the company.
I had the loans set up in four different portfolios without any real reason. I decided to change the way I set up the portfolios to make more sense to the way that I operate. I picked repayment date as the criteria for each portfolio since I like to be able to predict my cash flows. As a result, I now have my portfolios set up as follows:
Portfolio 1: Days 1 to 7
Portfolio 2: Days 8 to 14
Portfolio 3: Days 15 to 21
Portfolio 4: Days 22 to 31
This now allows me to see each portfolio according to the repayment schedule and I can see when each micropayment should come in. I will not be using this to hedge or do anything in particular with the different loans but it will make my financial organization a little bit neater.
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3 Responses to “Lending Club Portfolio Reorganization”
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[...] – LuLuGal from How I Save Money talks about taking out a loan using Lending Club to pay off some debt. This offers an alternative view as a borrower instead of a [...]
Cool idea. I also use the portfolio organization feature at Lending Club, but I do it based on which month I made the investment. It helps me understand if a particular month is better than others, and if my “criteria” for selecting loans that month needs adjustments based on # lates, or overall return.
We have very different methods of tracking our portfolios. I guess you have more loans than I do (?) so you can do it by month.